Fashion and homewares retailer Next raised its profits and sales forecasts after reporting a fall in first-quarter underlying sales at its retail stores that beat analyst predictions.
Next, the second-largest clothing retailer by sales value, today said like-for-like sales in stores unaffected by new openings fell 2.3 per cent in the 14 weeks to 2 May and forecast that first-half like-for-like sales would fall between 4 per cent and 7 per cent.
This compares with the company's previous forecast, which predicted a like-for-like sales fall of between 6 per cent and 9 per cent at Next Retail, with operating margins dropping by around 3 per cent.
"As a result of the better than expected sales to date we have added £15m to our internal profit forecasts," the company said in a statement.
Analysts, on average, expect Next to post a pre-tax profit of £360m for the year to the end of January 2010, down from £430m in the prior year, according to Reuters Estimates.
The company put the solid first-quarter performance down to the good weather and fewer people travelling overseas during the Easter holiday, because of the weakness of sterling.
However, Next said it expected the second quarter to be weaker than the first due to tougher comparatives.
Sales at Next's catalogue and online business Next Directory rose 1.6 per cent, with the company predicting first-half sales would likely be flat.
At the start of the year Next had forecast a sales fall of up to 2 per cent at Next Directory, with operating margins broadly flat at around 19 per cent.
Total group sales rose 1.2 per cent.